Lori Marks-Esterman and Jacqueline Ma Quoted in Law.com on the Appeal of Tornetta v. Musk Being Argued in Delaware Supreme Court

Lori Marks-Esterman, Chair of Olshan's Litigation Practice Group and Head of Olshan’s Shareholder Activism Litigation Practice, and Litigation Counsel Jacqueline Ma were quoted in a Law.com article (subscription required) on the appeal of Tornetta v. Musk that was argued last week in Delaware Supreme Court. They provide commentary on what attorneys and businesses are looking for from the decision as Delaware holds the keys to Delaware corporate law at large. Lori “expects the Supreme Court to devote significant attention to [the] core questions that come up in fiduciary duty litigation, including who is a controller, how courts determine if directors are independent and disinterested, [and] what needs to be disclosed to shareholders to make a shareholder vote informed and cleanse an otherwise flawed transactional process.” Lori further noted that she “expect[s] that the court will be keenly focused on examining how the issues impact not only the Tornetta appeal, but also Delaware jurisprudence more broadly, and their analysis and decision will be guided by preserving Delaware as the preeminent jurisdiction for corporations.” All eyes are also on the Delaware Supreme Court decision to see if it finds that the Delaware Court of Chancery should have amended its decision after Tesla’s latest ratification vote. “While a novel and creative move by Tesla, no case has ever held that a stockholder vote can ratify an adjudicated fiduciary breach,” Jacqueline said. “We also think that judicial approval of this strategy would lead to perverse outcomes: Companies would be disincentivized from making full and fair disclosures to stockholders in the first instance.”